You’re in the tree care business, but do you consider yourself a businessperson? If the answer is no, it may be time to consider beefing up your business management skills.
Expertise in trees is essential, but if you want to be successful over the long run, so is business acumen, says David Rines, owner of Rines ArborWorks in the Boston area. Rines is a certified arborist who has a master’s degree in urban forestry, as well as an MBA.
Rines worked in tree care as a summer job when he was younger and as a part-time job while pursuing his degree. After graduating he took a job with a firm that specialized in high-tech market research and customer satisfaction. When he was laid off in 2000, he decided to finally commit himself in a serious way to the tree care profession. “I decided to take the leap and go into it full time,” Rines recalls.
So, he earned his master’s degree in urban forestry from the University of Massachusetts and formed Rines ArborWorks. “I knew I needed to get serious about it in order to make a living,” he explains. With that in mind, Rines drew on his business education to structure his new company.
A key lesson taught in business school is the importance of identifying a target market, says Rines. “Figure out what you want to do and what kind of business you want to be,” he advises. “For me, providing high-quality service is more important than the size of my company.” Others might be more interested in expanding and serving as many customers as possible. Either way, having a vision for the company is critical for the next step: identifying potential customers.
“I decided the customer base I wanted was higher-end residential homeowners; I wanted to try to build relationships with those customers,” Rines explains. Determining his target customer and his desire to establish lasting relationships with those clients were critical decisions that have shaped almost every other aspect of his business, including the services he focuses on. “The bulk of the work I do is pruning and maintenance, and that’s year-after-year work,” states Rines. “If you can build a good relationship and rapport with good customers, you can cut down on all the busy time spent traveling around giving estimates and trying to chase work. The goal is to build an annuity of loyal clientele.”
Again, he turned to his business training to attain his goal. “Through my business and marketing background, I knew that in order to get customers to keep coming back you have to make them delighted. You want a delighted customer. It’s kind of a funny word, but that’s what they use in market research to describe real customer satisfaction,” says Rines. “Many hugely successful companies start there, by finding out exactly what customers want and giving it to them.”
Identifying his customer base and setting out to provide them with the highest level of service made sense as a business plan on paper. However, Rines admits he wasn’t exactly sure how it would play out. “I really wasn’t sure how it would work, but the business started to come in faster than I expected. I had a viable, profitable, tidy little business in the first year,” he recalls. Rines attributes that to referrals from satisfied customers.
Plan for growth
In business school he learned of companies that failed because they expanded too rapidly, so when he started seeing his business grow, he made a conscious decision not to grow too fast. “I wanted to keep it real. I didn’t want something that was going to get ahead of me,” he adds
His advice for others starting out in tree care: “Start small and keep your bottom line in the positive as much as possible, and start saving right away. Don’t grow too big too fast.”
Moreover, he recommends that owners of tree care companies consider their own personal desires before automatically trying to grow their businesses. “You’ve got to go with your comfort level. Growing a big business is not everyone’s comfort level, and that’s OK,” says Rines. “I know of people who have grown very big businesses very quickly and they’re doing very well. But I’ve also seen people who have mortgaged themselves to get a lot of equipment, thinking that the business will come. But the reality is you have to have the business first.”
Equipment by itself will not make you grow or make your business more successful, he emphasizes. “It’s almost a proxy of what really needs to happen, which is to get out there and get your name known and build customer satisfaction,” says Rines.
Doing good work is the best form of marketing, states Rines. “I have a website, but I really rely on what I think is the highest quality form of marketing, and that is word-of-mouth,” he says. “I’ve found that with advertising, you get a lot of tire kickers and people shopping around. But with referrals you’re halfway in the door in the sense that you’ve been endorsed. Someone has put their reputation on the line for you, so it’s just up to you to live up to that.”
Plus, he notes, word-of-mouth will continue to yield ever-expanding results in the future. He says, “It’s like a train getting going: You get a few referrals and the number just keeps picking up.”
Systems and organization
While getting his business degree, Rines took part in a program through the Small Business Administration to help small business owners. “I worked with a number of companies, and so much of it was not teaching them how to market – although there were problems with that – but rather about instituting good business practices,” he says. “The nuts and bolts of business. And some of that is pretty easy stuff, you just have to get organized.”
Spending time up front to get organized and create systems to follow will ultimately save time in the future. He says, “You have to think about what accounting systems you can put in place and what relationship-building systems you can put in place to get bigger.”
To help ensure organization and efficiency he recommends establishing processes and the use of some type of accounting software that will help keep track of customers and jobs. “I think it’s probably true with any business, but I’ve found that especially in tree care so much of it is logistics: how to most efficiently use your time,” he explains. It doesn’t have to be complex; if you’re new to business, start with a software package that’s easy to figure out, Rines advises. “You just want something that will let you create a proposal that you can send off to someone. Then, if they approve the job you can push a button and turn that into an invoice. It’s a simple thing, but it keeps you organized and saves a lot of time.”
Even with a business background, he started simply with Quicken Home Business. He’s since shifted over to the small business software package AccountEdge (from Acclivity) that offers a few more powerful features.
“If you’re trying to handwrite invoices, or you don’t have a way to track your numbers at the end of the year, that will choke you as a small business,” he states. A software package, and perhaps a training class on its use and basic accounting, will pay huge dividends. Rines adds, “It’s worth spending the money and time getting educated and understanding how to do it, or even having someone come in part time to help you.”
Rines uses his software to track year-over-year revenues. That’s one area many people like to focus on, but he stresses that it’s also important to analyze expenses, noting that he assigns all income and expenses to a category of his business – planting or pruning or tree removal, etc. “Looking at both of these things lets me know what activities have the most profitability,” says Rines. “I look at the numbers and I think about things like that. Or I might think about what type of equipment might help me be more profitable in a certain area.”
He also uses the software to keep track of all the information related to each customer and job. “Whenever I go to talk with a customer, I write notes down on everything that we talk about, and then I’ll type that up later in the software, so I have a complete packet of information for each customer,” explains Rines. “Even if a customer just wants a verbal quote, I’ll give them a figure but I’ll tell them, ‘Let me also type that up and send it to you just so you have a record and we’re on the same page.'”
Putting everything in writing helps with organization and record keeping, and it helps to prevent misunderstandings with customers, he adds. Whether it’s a large customer or small, a new customer or a reliable repeat customer, put everything in writing, he advises.
Some lessons aren’t taught in class, and Rines says he’s learned a lot from others in the tree care business who are operating successful companies, pointing out that there are many ways to get an education. “It doesn’t have to be a big business degree. That doesn’t hurt, and you can understand more complex things like internal rate of return,” he notes. But watching the business practices of others and instituting systems to keep things organized are relatively simple yet smart ways to strengthen a business. Finally, some lessons have to be learned through experience, says Rines: “Every year you get a little smarter and a little more efficient.”